The US Department of Labor (DOL) recently issued Administrator signed Opinion Letter FLSA2009-20. Although Opinion Letters only apply to the exact set of facts and circumstances presented in each case, they are a valuable aid in understanding current interpretations of the Fair Labor Standards Act (FLSA).
In this Opinion Letter, the DOL stated that non-profit organizations could be subject to enterprise coverage under the FLSA. In those situations in which the leasing company and the non-profit organization are determined to be a single enterprise, an otherwise exempt non-profit institution could be subject to the FLSA. The leasing company’s status as a covered enterprise under the FLSA could jeopardize the non-profit’s exempt status under the FLSA. Although organizations which have received an Opinion Letter from the DOL might be able to be assured that their status has not been jeopardized, other non-profit organizations should consider if any perceived benefits of using an employee leasing organization are worth the substantial risk of losing their exempt status under the FLSA.
State laws may provide rules that are more beneficial to the employee and must be followed. Contact Vision Payroll if you have questions about this Opinion Letter.